In a communication to all the principal secretaries of sugar-producing states, the ministry said mills must follow the Sugar Price (Control) Order, 2018, which directs them to sell sugar at the MSP.
“All mills have to sell sugar at Rs 31 a kg plus GST and transportation charges. Action may be taken against mills selling sugar below floor price,” said a senior official.
The official said the department had found that some mills were selling sugar either below MSP or at MSP inclusive of GST to liquidate their stock.
“This is against the directives of the government and is in violation of the Sugar Price (Control) Order, 2018,” he said.
The government, in February this year, increased the MSP of sugar to Rs 31 for the year 2019-20.
The higher MSP would provide more liquidity to sugar mills, which can then be able to pay arrears on sugarcane to farmers. As on February 13, mills arrears to farmers amounted to Rs 20,167 crore.